KAMPALA traders under their umbrella organization, the Kampala City Traders Association (KACITA) are looking forward to starting their own bank after commercial banks hiked interest rates last year to a level that pushed some of them out of business.
Everest Kayondo, the chairman of the association told traders at their annual general meeting (AGM) on March 20, that the organization is finalizing plans to officially launch the bank any time soon.
“We intend to open a commercial bank very soon that will cater for KACITA’S growing needs for investment as well as provide loans to traders at low interest rates in an effort to mitigate pressure from commercial banks that lend at exorbitant interest rates and push our colleagues out of business,” he said.
Under the law, the KACITA traders will be required to raise the minimum capital requirement by the central bank of Sh25bn intended to ensure that banks are in a better position to safeguard depositors’ money in bad economic times before launching their venture in to the banking sector.
“We intend to turn the association into a proactive body that positively influences business policy in Uganda. Although we have done a good job in securing loans for traders, a bank will take us a long way and the capital requirement will not fail us this time,” Kayondo said.
“The association has in past years, gained a reputation for demanding fair trade terms for the business community in Kampala but it is time to have our own bank where we can access cheap loans for business instead of relying on others,” he added.
Kayondo said the bank in question will be a public limited company with mainly traders buying and selling shares although he declined to give the name of the bank and that date of its launch.
Currently, there are 25 commercial banks, offering both retail and wholesale services to 20% of Uganda’s population.